Social Media's Impact on Commerce is Just Beginning

by Will Hernandez 0

Mitch Spolan, senior vice president ofnational sales for LivingSocial, provided some eyebrow-raisingstatistics this week to Prepaid Expo attendees during a paneldiscussion about mobile payments. Living Social’s success with adeal last year that saw consumers buy a $10 Starbucks gift card for$5 highlighted the affect social media can have on increasingrevenue for retailers.

LivingSocial sold 1.5 million Starbucks cards in 29 hours. ItsFacebook post about the deal was shared over 225,000 times. By theend of the day, the deal trended higher on Twitter than First LadyMichelle Obama’s speech during the Democratic NationalConvention.

“Consumers see something they like and they want to shout it fromthe rooftops,” Spolan said. “The social function is actuallyworking. Even people who aren’t buying a specified deal are postingabout it and putting their own spin on it.”

Talk about free marketing!

Since the beginning of the year, we’re seeing more ways paymentsand social media are becoming intertwined.

American Express recently announced a partnership with Twitterthat enables the company’s cardholders to purchase products bysyncing their card on the Amex website and then tweeting specifichashtags. Shortly after that, Foursquare announced its deal withFirst Data that enables participating merchants to push deals toVisa and MasterCard credit and debit cardholders.

Facebook is putting on a full-court press with Gifts. AndCardlytics is pushing merchant-funded offers to Facebook users. Addthose major announcements to other “minor” initiatives and it’sclear social media will have a monetary impact going forward fornetworks, processors, merchant acquirers, and mostly importantly,retailers.

Consumers have powerful tools in their hands in the Facebook share,retweet, and Foursquare check-in. When payments companies andretailers mesh social media into their marketing, offerings, andproducts, the end result should be a positive one.

Let me use LevelUp as an example.

I can link my Facebook account with LevelUp’s mobile application.When I receive a merchant discount for paying with LevelUp, thatnews appears on my friends’ news feed and there is a box on myprofile that displays how much credit I receive if I spend acertain amount of money at a LevelUp retailer. In my case, it’sonly been a coffee shop in my neighborhood. But that’s enough formy Facebook friends to ask about LevelUp and how it works. Somesign up, some don’t, but it illustrates the power of theshare.

LevelUp also allows me to Facebook or tweet a unique code thatgives me a $5 credit when I refer a friend to LevelUp and they usethe $5 promotional credit I give them. Again, social media helps todrive that initial LevelUp transaction.

LevelUp is just one example to illustrate Spolan’s point. Consumersare sharing deals and the social function is actuallyworking.

Visit PaymentsJournal’s Social Media StrategySession.